VAT on private tutoring: requirements for training exemptions

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of the Value Added Tax (IVA) exemption on the provision of training services provided by individuals. The issue focuses on determining whether subjects such as mindfulness or communication skills can benefit from the exemption provided for in current regulations.

What the DGT has ruled

The administration has determined that, for private tutoring provided by an individual to enjoy the VAT exemption in accordance with Article 20.One.10 of Law 37/1992, two conditions must be strictly met:

• The subjects taught must be included in the curricula of any level or grade of the official education system.
• The professional must not be required to register in the business or artistic activity rates of the Business Activity Tax (IAE).

In the case of subjects that are not part of official educational curricula, such as training in communication skills or mindfulness, the activity is subject to the general rate of 21 percent. Likewise, the DGT clarifies that the application of this exemption does not require prior administrative authorization.

What it means for you

If you are an individual professional offering training services, you must be cautious when applying the VAT exemption. It is not enough for the activity to be of an educational or personal development nature. If the content of your classes is not included in the official curricula of the education system, the provision of services is subject to the 21 percent tax rate.

What you should do

It is necessary to verify whether the contents being taught are integrated into recognized academic programs. In the event that the training focuses on skills that are not part of the official curriculum, the general VAT rate must be applied to avoid contingencies with the Tax Administration. It is recommended to assess the nature of your services and your situation regarding the Business Activity Tax (IAE) to ensure regulatory compliance.